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Confidence Interval and Sample Size Determination

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Families USA, a monthly magazine that discusses issues related to health and health costs, surveyed 20 of its subscribers. It found that the annual health insurance premiums for a family with coverage through an employer averaged $10,979. The standard deviation of the sample was $1,000.
a. Based on this sample information, develop a 90 percent confidence interval for the population mean yearly premium.
b. How large a sample is needed to find the population mean within $250 at 99 percent confidence?

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Solution Summary

A 90 percent confidence interval is found for the population mean yearly premium in the solution. How large the sample is needed to find the population mean within $250 at 99 percent confidence is determined.

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